Luxury Goods & Services

Flickr/Creative Commons – Jesse Kristalie

The UK is an attractive location for banking, international finance and professional services, property investments, and other types of luxury goods. It is not surprising that, in the same way that the UK attracts legitimate resources-resources-business and clean money, it is also a target for organised crime and corrupt politicians and officials. This is because many elite corrupt figures want to display their wealth and wealthy lifestyle by acquiring “badges of wealth” such as luxury homes, expensive vehicles, speed boats, jewellery for instance. By laundering the proceeds from their corruption to pay for these, they can avoid detection by tax or law enforcement authorities.

The responsibility for detection and deterrence of grand corruption and money laundering must reside primarily with private sector anti-money laundering controls. Banks and other professional intermediaries such as lawyers and accountants are the front line in detecting and reporting suspicious transactions, as are art and jewellery dealers, auction houses, and real estate agents.

Property is a key risk area for the UK, and demonstrates how the anti-money laundering regime is failing. Foreign buyers bought up to 75% of new homes in central London over the past year, and reportedly account for 49% of all properties, new and existing, worth more than £1m in central London over the same period. It can be stated with a high degree of confidence that some of this money is likely to be the proceeds of foreign corruption. And a recent leak of information from the British Virgin Islands (BVI) suggests that in 2011, £3.8 billion worth of UK property was bought by BVI-registered companies. Transparency International UK is therefore concerned that there is very low awareness of money laundering in the sector, and this is backed up by very low levels of detection and reporting of money laundering by estate agents and solicitors.

We are therefore campaigning to strengthen the anti-money laundering regime so that it is harder for corrupt individuals to launder their proceeds, and enjoy the benefits of acquiring luxury goods. We also support moves towards ending corporate secrecy.